From Pernod Ricard SA to Technicolor SA to XPO Logistics Europe SA, a growing number of France-listed companies have come under pressure from activists recently, prompting regulators there to consider steps to stymie their influence through legislation. And some of the measures may also make sense this side of the pond, according to Wachtell, Lipton, Rosen & Katz.
“The report’s recommendations focus on responding to the excesses of activists in the French market with enhanced disclosure, reduced asymmetry of regulation between activist investors and French public companies and enhanced regulations with respect to short selling,” Wachtell Lipton wrote in a note to clients Friday. “Notably, the recommendations include reducing the threshold for disclosure of equity ownership (including derivatives and other synthetic ownership) from 5% to 3%.”
Wachtell Lipton goes on to point out it has reported on similar legislation in the U.S. in recent years that has essentially gone nowhere. “We are encouraged to see other countries taking these risks seriously and taking steps to address them,” Wachtell Lipton wrote.